Apple To Report Disappointing First Quarter Results

CUPERTINO, CaliforniaDecember 5, 2000Apple® today announced that it has
experienced significantly slower than expected sales during October and
November, which will result in revenues and earnings for its quarter ending
December 30, 2000 being substantially below expectations.

The company expects to report revenue of about $1 billion and a net loss,
excluding investment gains, of between $225 and $250 million when actual
results are announced on January 17, 2001.

The $600 million revenue shortfall from previous expectations is due to
lower than expected channel sell-through across all geographies and
unplanned sales promotions and pricing actions. The net loss is the result
of the revenue shortfall and cancellation charges related to decreases in
forecasted component purchases for current products.

The swift industry-wide decline in PC sales will result in Apples first
non-profitable quarter in three years, said Apples CEO Steve Jobs. Were
not happy about it, and plan to return to sustained profitability next
quarter. We are committed to reducing our channel inventories to normal
levels by the end of this quarter, and remain very excited about the new
products and programs Apple will be rolling out in 2001.

In light of the lower results anticipated for the December quarter, we now
expect revenues for fiscal 2001 to be in the $6 to $6.5 billion range, said
Apples CFO Fred Anderson.

Apple management will conduct a conference call today for financial analysts
and the news media at 2 p.m. (PST)/5 p.m. (EST). The dial-in number for
financial analysts is (913) 981-5510, and the number for news media is (913)
981-5519. A recording of this call will be available for replay for seven
days beginning at 5 p.m. (PST)/8 p.m. (EST). The number for the replay is
(719) 457-0820 and the confirmation code is 446507.

Apple will also provide live streaming of todays conference call utilizing
QuickTime, Apples standards-based technology for live and on-demand audio
and video streaming. The live webcast will begin at 2 p.m. (PST)/5 p.m.
(EST) today at http://www.apple.com/quicktime/qtv/q101_update/ and will also
be available for replay. The QuickTime player is available free for
Macintosh® and Windows users at www.apple.com/quicktime.

Apple ignited the personal computer revolution in the 1970s with the Apple
II and reinvented the personal computer in the 1980s with the Macintosh.
Apple is committed to bringing the best personal computing experience to
students educators, creative professionals and consumers around the
world through its innovative hardware, software and Internet offerings.

Except for the historical information contained herein, the statements in
this press release are forward-looking statements that involve risks and
uncertainties. Potential risks and uncertainties include, without
limitation, continued competitive pressures in the marketplace; the effect
competitive and economic factors and the Companys reaction to them may have
on consumer and business buying decisions with respect to the Companys
products; the ability of the Company to make timely delivery of new
programs, products and successful technological innovations to the
marketplace; the continued availability of certain components and services
essential to the Companys business currently obtained by the Company from
sole or limited sources and the ability of the Company to successfully
evolve its operating system. More information on potential factors that
could affect the companys financial results is included from time to time
in the Companys public reports filed with the SEC, including the Companys
Form 10-K for the 1999 fiscal year, and the Companys Form 10-K for the
fiscal year ending September 30, 2000, to be filed with the SEC.